Finance Ministry on Saturday held extensive discussions with the top brass of banks and debt recovery tribunals regarding further amendments that may be needed for expeditious recovery of debts in SARFAESI and DRT Acts. 

The meeting, chaired by Vivek Joshi, Secretary of the Department of Financial Services (DFS), also discussed that DRTs and DRATs would take all possible steps to reduce pendency at various stages through strict monitoring.

it was also decided that banks and financial institutions must leverage the e-auction platform, currently under development, for listing and auction of properties under the provisions of various acts such as the SARFAESI Act, 2002, RDB Act, 1993, and IBC, 2016.

Also, banks will now conduct periodical review of the performance of empanelled advocates at debt recovery tribunals (DRTs) and rationalise the cases assigned to them based on performance.

Banks have been directed to ensure the presence of their officers at all the hearings of their respective cases before judicial forums.

The Centre has been amending the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act from time to time. 

During the last five financial years, ₹1,51,428 crore have been recovered by SCBs through SARFAESI, sources said.

Saturday’s meeting was also attended by senior officers from the public and private sector banks; the chief executive officer (CEO) of Indian Bank Association (IBA); and senior officers from the Ministry of Finance and Insolvency and Bankruptcy Board of India (IBBI).

The Debt Recovery Tribunals Act was first enacted to streamline the recovery of public dues, but the proceedings under that law did not yield the desirous results. Hence, the SARFAESI Act was enacted.

In the last 10 years, India has moved from being the 10th largest economy in the world to the 5th largest.

Bank credit, in recent years, has shown phenomenal growth, outpacing the growth in deposits on the back of sustained demand momentum and robust economic recovery after the Covid-19 pandemic, according to a recent Finance Ministry report.

The growth in non-food bank credit at 15 per cent in FY23 was the highest in the last ten years. This would not have been possible without a significant improvement in the banking sector’s health. Even as credit growth surged, asset quality across all SCB groups kept improving, with gross non-performing assets (GNPAs) and net NPAs relative to total advances dropping to a multi-year low in September 2023.